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Dr. Sigurt Vitols Science Center Berlin (WZB)

Dr. Sigurt Vitols Science Center Berlin (WZB). Participation: an asset of Corporate Governance in MNC’s. Does the SE provide an advantage for enterprises and investors?. Presentation prepared for the SEEurope Network Conference, 29-30 November 2004, Brussels. Key Questions for the Study.

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Dr. Sigurt Vitols Science Center Berlin (WZB)

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  1. Dr. Sigurt Vitols Science Center Berlin (WZB) Participation: an asset of Corporate Governance in MNC’s. Does the SE provide an advantage for enterprises and investors? Presentation prepared for the SEEurope Network Conference, 29-30 November 2004, Brussels

  2. Key Questions for the Study • Internationalization and company change • Resulting challenges for HRM • Workers’ Participation: The Management View • EWC + SE

  3. Study Design • DJ Stoxx 600 • Postal survey of 165 Companies w/ EWC • 63 Replies (38 % Response Rate) • 13 In-depth Interviews • Access to Lift.com Participants

  4. Internationalization at Company Level • Weakening of National HQ vis-a-vis Regional and/or Divisional HQ • Regional Production + Sales Strategies • Product + process standardization • Regional/divisional HRM upgraded • Increased Monitoring by Capital Markets + NGOs • Uneven Process

  5. Examples of Company Change • Centralization at GM Europe HQ/Detroit • BP European HQ in Paris • Devolution of responsibility to divisions (e.g. Degussa, Zeneca) • Centralization of risk management function in financial services

  6. Challenges for European HRM • Understanding national cultural and legal differences • Harmonization of HRM policy which respects national differences • Create “real” corporate culture/identity • Encourage cross-border mobility of employees • Develop truly international management cadre • Implementing European legislation (e.g. timely info for EWC) • “Think globally and act locally” • Increase local control/monitoring w/o increasing bureaucracy • CSR/Sustainability/Code Implementation

  7. European Employee Participation • 2/3 managers see EWCs positively + have plans for improvement • Better communication, acceptance, decisions • Decrease in decision speed • No “country of origin” effect • However: significant minority negative • Near-consensus: no negotiating rights, no strengthened Directive

  8. Some Benefits of EWCs • Upgrading of HR function • Discussion of new topics: strategy, finances, health + safety, training • From information to consultation • Agreements/statements on: • Health and safety • Sustainable development • Social + ethical charters

  9. Enlightened Managers: EWC future role • More confident information conduit • More informed consultative body able to act as a genuine interlocutor • A serious and active partner • A key role in European social dialogue • A brainstorming group • A platform for a constructive social dialogue and wide-ranging communication

  10. Adoption of SE: Wait and See? • 8 %: likely to adopt • 12 %: “unthinkable” • 80 %: “Might be considered but unlikely that it would be adopted” • Key issues: taxation, simplification of corporate structure, financial reporting + transparency, employee representation

  11. Participation + SE: Possible Advantages • Upgrading of HRM function • Improvement in employee communication + motivation, implementation of change • Independent force monitoring management • „New“ issues: CSR, transparency, pension funds • Role for trade unions?

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